The rating agency Moody's changed Mexico's credit outlook from Stable to Negative, reflecting concerns over recent changes in the institutional environment, especially the reform of the Judiciary, although it maintained the rating at Baa2.
In this context, it was emphasized that macroeconomic imbalances are considered "modest" due to a track record of relatively prudent fiscal and monetary policies that support the rating. However, there were warnings about a possible weakening in policy-making and institutional environments that could undermine fiscal and economic outcomes.
The review of Mexico's credit rating is based on the view of a deterioration in the affordability of debt and greater rigidity in public spending, which may lead to a deviation of the fiscal sector from a history of low deficits. It was highlighted that these factors could generate additional economic pressures in the country.
Moreover, it was mentioned that the constitutional reform poses risks to the Mexican judicial system by jeopardizing checks and balances, which could negatively impact Mexico's economic and fiscal strength.
President Claudia Sheinbaum recently announced a plan for Pemex, in which the tax burden for the oil company will be reduced through a single tax payment. The payment of Pemex's debt in the market was guaranteed, although it was pointed out that fiscal risks persist for the government if the oil company's contingent liabilities materialize on its balance sheet.
Pemex's credit rating will be reviewed by the agency once Rogelio Ramírez de la O presents the 2025 budget package. Despite these measures, Pemex continues to be considered a risk factor for the Mexican economy.
